Thursday, November 24, 2011
Gevaarligte vir huisverhuurders
Gevaarligte vir huisverhuurders: Die betalingsgedrag van residensiële huurders was in die derde kwartaal van vanjaar bestendig, maar waarskuwingsligte begin flikker. Huurders in die huurgeld-kategorie R3 000 en minder en R12 000 en meer per maand was in die kwartaal onder druk, blyk uit die nuutste huurmonitordata van die Tenant Profile Network (TPN).
Sunday, October 16, 2011
House price growth!
House price growth has slowed to a crawl in September according to a report by Standard Bank. Standard Bank's median house price (smoothed) posted a growth rate of 0.6 percent year on year (y/y) in September, from 1.6 percent y/y in August whereas growth in real terms remained negative. The slowdown in house price growth runs parallel with the weakening SA economy.
GDP growth slowed to 1.3 percent quarter on quarter (q/q) seasonally adjusted annual rate (saar) in the second quarter of 2011, from 4.5 percent q/q (saar) in the first quarter. Home prices still falling.
Trends in house prices remained mixed in the South African housing market, based on the Absa house price indices for small, medium-sized and large houses, for which the bank had approved mortgage finance. House prices still mixed.
John Loos, property strategist at FNB Home Loans said that estate agents estimated a decline in the percentage of sellers selling their homes in order to downscale due to financial pressure, from 25% in the previous quarter to 19%. He said that this could be the start of results from the long process of household debt-to-income reduction, and other measures aimed at rebuilding balance sheets, coming through. "It is too early to tell though, and another few data points will be required. But we do know from SARB (South African Reserve Bank) data that the decline in the household debt-to-disposable income ratio, and thus the debt-service ratio, continues."
The third quarter survey, undertaken in August, points towards a slight increase in residential demand, and some mild improvement in estate agent confidence, but it's not a market with any strong direction. Households debt pressure reducing.
Info supply by CyberProp!
GDP growth slowed to 1.3 percent quarter on quarter (q/q) seasonally adjusted annual rate (saar) in the second quarter of 2011, from 4.5 percent q/q (saar) in the first quarter. Home prices still falling.
Trends in house prices remained mixed in the South African housing market, based on the Absa house price indices for small, medium-sized and large houses, for which the bank had approved mortgage finance. House prices still mixed.
John Loos, property strategist at FNB Home Loans said that estate agents estimated a decline in the percentage of sellers selling their homes in order to downscale due to financial pressure, from 25% in the previous quarter to 19%. He said that this could be the start of results from the long process of household debt-to-income reduction, and other measures aimed at rebuilding balance sheets, coming through. "It is too early to tell though, and another few data points will be required. But we do know from SARB (South African Reserve Bank) data that the decline in the household debt-to-disposable income ratio, and thus the debt-service ratio, continues."
The third quarter survey, undertaken in August, points towards a slight increase in residential demand, and some mild improvement in estate agent confidence, but it's not a market with any strong direction. Households debt pressure reducing.
Info supply by CyberProp!
Thursday, August 4, 2011
House prices show growth, buy now
South African house prices have grown to 4.6 percent in July from 3.1 percent in June as revealed in the FNB House Price Index released yesterday.
FNB Home Loans property strategist, John Loos says in real terms when adjusted for consumer price inflation, the year-on-year growth for June remained in negative territory to the tune of -1.8 percent.
“On a month-to-month basis, average price growth was unchanged at 0.73 percent while the average price of properties transacted in the index was R815. 511,” says Loos.
He explains that the acceleration in the year-on-year rate of house price inflation is believed to still be the lagged impact of a mild uptick in residential demand as reported in the FNB Estate Agent Survey. Two further cuts in interest rates in late 2010 being the other factor.
The highest point in real terms growth was recorded in February 2008 in the FNB House Price Index’s 11 year history. The cumulative downward adjustment in real house prices from the high of February 2008 to July 2011 measures -14.7 percent. In nominal terms, the index revealed a mild cumulative increase of +6.4 percent from February 2008 to July 2011.
“Our expectation is for the recent acceleration in house price growth to be short-lived, with a slowing in the pace of growth resuming late in 2011,” Loos said.
The property market may not be what it used to be what with many people battling to secure home loans and some home owners selling to become tenants. Estate agents, however, say in some areas, they are seeing an increase in property buyers. Even with house prices declining, with careful search one can easily find bargains.
Info supplied by Property24.com
FNB Home Loans property strategist, John Loos says in real terms when adjusted for consumer price inflation, the year-on-year growth for June remained in negative territory to the tune of -1.8 percent.
“On a month-to-month basis, average price growth was unchanged at 0.73 percent while the average price of properties transacted in the index was R815. 511,” says Loos.
He explains that the acceleration in the year-on-year rate of house price inflation is believed to still be the lagged impact of a mild uptick in residential demand as reported in the FNB Estate Agent Survey. Two further cuts in interest rates in late 2010 being the other factor.
The highest point in real terms growth was recorded in February 2008 in the FNB House Price Index’s 11 year history. The cumulative downward adjustment in real house prices from the high of February 2008 to July 2011 measures -14.7 percent. In nominal terms, the index revealed a mild cumulative increase of +6.4 percent from February 2008 to July 2011.
“Our expectation is for the recent acceleration in house price growth to be short-lived, with a slowing in the pace of growth resuming late in 2011,” Loos said.
The property market may not be what it used to be what with many people battling to secure home loans and some home owners selling to become tenants. Estate agents, however, say in some areas, they are seeing an increase in property buyers. Even with house prices declining, with careful search one can easily find bargains.
Info supplied by Property24.com
Thursday, May 5, 2011
Your Bond is still the best saving mechanism
Article By Adrian Goslett - RE/MAX 05 May 2011
South Africans typically have a bad savings culture, and consumer behaviour shows a tendency by South Africans to rather ‘borrow to buy’ instead of saving up for a purchase. Saving takes discipline and means spending less than you earn, but how many people, despite numerous warnings over the years, have actually adjusted their lifestyle and spending habits to accommodate some kind of savings? Not many at all according to Glenn Norton, Broker/Owner of RE/MAX Masters, which operates in the Johannesburg suburbs of Bryanston and Weltevreden Park.
Norton says that what many people don’t realise is that a small saving can actually have a huge effect, especially if that saving is on a bond. He cites an example of a home loan of R750 000, paid over a 20-year period at 9% interest, where monthly instalments would be roughly R6747. “If you had to pay R100 extra into your bond each month, you could save in the region of R40713 over the bond period. If you had to pay in an extra R200 each month into this bond, you would save around R77 271 over the total bond period,” Norton explains.
He says that most people eat out at a restaurant at least twice each month, and since saving involves a change in consumer behaviour, Norton says homeowners should consider only eating out once a month instead, for example, and putting that the money that would have been spent at the restaurant into the bond instead. “An average meal out for two people could come to around R400, but if you had to rather pay that into the bond as mentioned above each month, you would save a whopping R140 382 over the term of the bond.”
But Norton says just because you are saving into your bond doesn’t mean you should reduce the term. He says that by comparison, if you had to put R10 000 into a typical savings account at the bank, the most interest you could expect to earn would be 5% at a push. But one capital payment of this amount into the bond would save you an effective 9% interest.
“As your salary increases, so too should your bond repayments, and if you get a bonus or any other lump sum payouts, consider paying some or all of it into your bond,” advises Norton. “If you had to put in a lump sum of R10 000 every year for ten years and pay an extra R800 into your bond each month, you could save over R200 000 in interest and could shorten your payment term by about five years.”
Adrian Goslett, CEO of RE/MAX of Southern Africa, notes that the Savers Review released by the South African Savings Institute in November last year indicated that many South Africans have in fact started to increase their level of savings. Savings in South Africa as a percentage of GDP were at 18.8% in 2008, and while they decreased to 18,4% during 2009, undoubtedly as a result of recessionary effects, they increased to 20,4% in 2010. However, research indicates that different income groups view savings differently, and according to the Bureau of Market Research, low and middle income groups lack confidence in their ability to save. However, it is in these income groups where a culture of saving would be most beneficial.”
“What could you do with an extra R100 000 or R200 000?” asks Norton. “Even with the property market having experienced a decline, paying money into your bond is still the best form of saving. Over the past ten years property has outperformed most other investments, and property remains one of the best asset classes in which to invest,” he concludes
Article posted by Private Propety
South Africans typically have a bad savings culture, and consumer behaviour shows a tendency by South Africans to rather ‘borrow to buy’ instead of saving up for a purchase. Saving takes discipline and means spending less than you earn, but how many people, despite numerous warnings over the years, have actually adjusted their lifestyle and spending habits to accommodate some kind of savings? Not many at all according to Glenn Norton, Broker/Owner of RE/MAX Masters, which operates in the Johannesburg suburbs of Bryanston and Weltevreden Park.
Norton says that what many people don’t realise is that a small saving can actually have a huge effect, especially if that saving is on a bond. He cites an example of a home loan of R750 000, paid over a 20-year period at 9% interest, where monthly instalments would be roughly R6747. “If you had to pay R100 extra into your bond each month, you could save in the region of R40713 over the bond period. If you had to pay in an extra R200 each month into this bond, you would save around R77 271 over the total bond period,” Norton explains.
He says that most people eat out at a restaurant at least twice each month, and since saving involves a change in consumer behaviour, Norton says homeowners should consider only eating out once a month instead, for example, and putting that the money that would have been spent at the restaurant into the bond instead. “An average meal out for two people could come to around R400, but if you had to rather pay that into the bond as mentioned above each month, you would save a whopping R140 382 over the term of the bond.”
But Norton says just because you are saving into your bond doesn’t mean you should reduce the term. He says that by comparison, if you had to put R10 000 into a typical savings account at the bank, the most interest you could expect to earn would be 5% at a push. But one capital payment of this amount into the bond would save you an effective 9% interest.
“As your salary increases, so too should your bond repayments, and if you get a bonus or any other lump sum payouts, consider paying some or all of it into your bond,” advises Norton. “If you had to put in a lump sum of R10 000 every year for ten years and pay an extra R800 into your bond each month, you could save over R200 000 in interest and could shorten your payment term by about five years.”
Adrian Goslett, CEO of RE/MAX of Southern Africa, notes that the Savers Review released by the South African Savings Institute in November last year indicated that many South Africans have in fact started to increase their level of savings. Savings in South Africa as a percentage of GDP were at 18.8% in 2008, and while they decreased to 18,4% during 2009, undoubtedly as a result of recessionary effects, they increased to 20,4% in 2010. However, research indicates that different income groups view savings differently, and according to the Bureau of Market Research, low and middle income groups lack confidence in their ability to save. However, it is in these income groups where a culture of saving would be most beneficial.”
“What could you do with an extra R100 000 or R200 000?” asks Norton. “Even with the property market having experienced a decline, paying money into your bond is still the best form of saving. Over the past ten years property has outperformed most other investments, and property remains one of the best asset classes in which to invest,” he concludes
Article posted by Private Propety
Thursday, April 14, 2011
Pricing is the key to selling property
According to a recent FNB Estate Agent Survey, the average time properties remain on the market is around 19 weeks and 1 day, with 85 percent of sellers having to drop their asking prices, which is an indication of unrealistic pricing in the market.
Sellers can exercise their own initiative and get an online valuation report, which allows them to establish a market-related price and check this against the pricing recommendation from the agent.
When asking prices are set in line with current market conditions, the average time a property is on the market is significantly reduced and the chances of a quick and successful sale are dramatically improved.
Pricing a property correctly from the start can save sellers much wasted time and stress. There is a surplus of homes for sale at the moment, so buyers are often spoilt for choice and will not fall for an over-inflated price. Although sellers frequently feel that their home is worth more and are often disappointed at an agent’s pricing recommendation, the market ultimately dictates what a buyer will offer.
Also, homebuyers typically only look at those properties that are within a price range that they can afford, says Lee Siebert, Broker/Owner of RE/MAX Helderberg. The trick is to get the pricing just right to suit the current state of the market. So what is real market value?
“Essentially, real market value refers to what a seller could expect a buyer to pay for their property in a competitive market. However, it must be remembered that even though the market value of your home is usually set by a professional, in the end the true market value is determined mainly by what a buyer is willing to pay for the property,” says Siebert.
Siebert says that the easiest and most accurate method of establishing the market value of your home is to get an experienced real estate agent to evaluate your property. The method used by most estate agents is a comparative market analysis (CMA).
“By analysing what houses of a similar size as yours sold for over the last three to six months, as well as determining the average price per square metre the homes in your area are commanding, the CMA provides agents with a solid price base to use to determine a reasonable asking price for the property in question,” says Siebert.
Sellers can also exercise their own initiative and get an online valuation report that provides information on what similar properties in the street, complex or suburb have actually sold for. This allows them to establish a market-related price and check this against the pricing recommendation from the agent.
However, there is more to setting the right asking price than simply establishing a value based on a comparative market analysis, says Adrian Goslett, CEO of RE/MAX of Southern Africa. “While such an analysis will provide a crucial guideline in terms of the pricing a particular type of property in the specific area, other factors should be taken into account, most importantly the psychological effect of a certain price range.
“This is not an exact science, but rather a skill acquired through knowledge of the specific market and experience with buyers, and highlights the value an experienced estate agent can bring to a property sale,” he says.
Siebert agrees that any experienced agent will take into account the other factors that will affect the value of a property. These include market demand and the condition of the property, its size and elevation, does it have a view, the state of the garden, the age and modernity of the kitchen and the bathrooms, various security features, as well as various cosmetic updates, such as the flooring, fireplaces, light fixtures, and whether the home has been painted with a fresh coat of paint for example.
But the main element in determining an accurate value is current market conditions. The recent FNB Estate Agent Survey revealed that the percentage of sellers having to drop their asking prices increased from 80% in the previous quarter to 85% in the first quarter 2011 survey, with the average price drop estimated at -12%.
“This indicates that many sellers in South Africa are still hoping to obtain unrealistic prices given the current state of the market,” says Siebert. “The consequences of unrealistic pricing are clearly reflected in the average time properties remain on the market.”
The need to adjust house prices to suit current market conditions is not a South African phenomenon. Sellers in property markets across the globe are facing similar challenges, and although the exact percentages vary from one market to another, the trend of reducing asking prices is a global one.
For example, in the UK, it has been widely reported in the media that home owners are being forced to accept offers of 10% below the asking price in order to sell their properties. On the other side of the globe, data released by the Real Estate Institute of Western Australia reveals that 67% of sellers in Perth are prepared to drop the asking price by an average 6% to get a sale. Furthermore, the most recent data from Trulia.com, a real estate listings website in the US which tracks 50 major property markets in North America, shows that 20% of asking prices for current home listings were reduced at least once.
Siebert says that sellers in South Africa should take note of these global trends and apply the learning: setting a realistic selling price is only way to effectively sell a property in the shortest amount of time possible.
“The basic economic law of supply and demand will always prevail. When an oversupply situation exists, and the number of buyers is severely limited by the availability of finance, selling prices will be subdued and overpriced properties will simply not sell,” says Siebert.
Published by Property 24
Sellers can exercise their own initiative and get an online valuation report, which allows them to establish a market-related price and check this against the pricing recommendation from the agent.
When asking prices are set in line with current market conditions, the average time a property is on the market is significantly reduced and the chances of a quick and successful sale are dramatically improved.
Pricing a property correctly from the start can save sellers much wasted time and stress. There is a surplus of homes for sale at the moment, so buyers are often spoilt for choice and will not fall for an over-inflated price. Although sellers frequently feel that their home is worth more and are often disappointed at an agent’s pricing recommendation, the market ultimately dictates what a buyer will offer.
Also, homebuyers typically only look at those properties that are within a price range that they can afford, says Lee Siebert, Broker/Owner of RE/MAX Helderberg. The trick is to get the pricing just right to suit the current state of the market. So what is real market value?
“Essentially, real market value refers to what a seller could expect a buyer to pay for their property in a competitive market. However, it must be remembered that even though the market value of your home is usually set by a professional, in the end the true market value is determined mainly by what a buyer is willing to pay for the property,” says Siebert.
Siebert says that the easiest and most accurate method of establishing the market value of your home is to get an experienced real estate agent to evaluate your property. The method used by most estate agents is a comparative market analysis (CMA).
“By analysing what houses of a similar size as yours sold for over the last three to six months, as well as determining the average price per square metre the homes in your area are commanding, the CMA provides agents with a solid price base to use to determine a reasonable asking price for the property in question,” says Siebert.
Sellers can also exercise their own initiative and get an online valuation report that provides information on what similar properties in the street, complex or suburb have actually sold for. This allows them to establish a market-related price and check this against the pricing recommendation from the agent.
However, there is more to setting the right asking price than simply establishing a value based on a comparative market analysis, says Adrian Goslett, CEO of RE/MAX of Southern Africa. “While such an analysis will provide a crucial guideline in terms of the pricing a particular type of property in the specific area, other factors should be taken into account, most importantly the psychological effect of a certain price range.
“This is not an exact science, but rather a skill acquired through knowledge of the specific market and experience with buyers, and highlights the value an experienced estate agent can bring to a property sale,” he says.
Siebert agrees that any experienced agent will take into account the other factors that will affect the value of a property. These include market demand and the condition of the property, its size and elevation, does it have a view, the state of the garden, the age and modernity of the kitchen and the bathrooms, various security features, as well as various cosmetic updates, such as the flooring, fireplaces, light fixtures, and whether the home has been painted with a fresh coat of paint for example.
But the main element in determining an accurate value is current market conditions. The recent FNB Estate Agent Survey revealed that the percentage of sellers having to drop their asking prices increased from 80% in the previous quarter to 85% in the first quarter 2011 survey, with the average price drop estimated at -12%.
“This indicates that many sellers in South Africa are still hoping to obtain unrealistic prices given the current state of the market,” says Siebert. “The consequences of unrealistic pricing are clearly reflected in the average time properties remain on the market.”
The need to adjust house prices to suit current market conditions is not a South African phenomenon. Sellers in property markets across the globe are facing similar challenges, and although the exact percentages vary from one market to another, the trend of reducing asking prices is a global one.
For example, in the UK, it has been widely reported in the media that home owners are being forced to accept offers of 10% below the asking price in order to sell their properties. On the other side of the globe, data released by the Real Estate Institute of Western Australia reveals that 67% of sellers in Perth are prepared to drop the asking price by an average 6% to get a sale. Furthermore, the most recent data from Trulia.com, a real estate listings website in the US which tracks 50 major property markets in North America, shows that 20% of asking prices for current home listings were reduced at least once.
Siebert says that sellers in South Africa should take note of these global trends and apply the learning: setting a realistic selling price is only way to effectively sell a property in the shortest amount of time possible.
“The basic economic law of supply and demand will always prevail. When an oversupply situation exists, and the number of buyers is severely limited by the availability of finance, selling prices will be subdued and overpriced properties will simply not sell,” says Siebert.
Published by Property 24
Thursday, February 24, 2011
Start your own property portfolio
Article By Private Property Reporter 23 Feb 2011
Real estate is one of the most exciting and dynamic businesses to be involved in, and historically this is the best place to invest some of your hard earned cash. Many investors buy properties and bank them, and then sell the properties off once they have either served their purpose or have gained value.
At times the investor sells off a portion of the portfolio or a whole portfolio, but timing is the key factor. Most successful property owners, once having built a substantial portfolio prefer to hang on to their assets, and are loath to selling, as the buildings and properties bring in rental income.
If you want to start your own property portfolio, it would be advisable to bank your properties for a couple of years, and then sell them at a profit. A five to seven year period is often a good time.
Real estate is often perceived to be a cutthroat business and not for the faint of heart, but the adrenalin rush when a major deal comes together can beat no other! Properties to buy / properties for sale are always in big demand, and those that are good value for money – well there simply are not enough of them.
Many real estate developers and investors buy run down shopping centres, commercial buildings and warehousing for the sole purpose of fixing them up and selling them off at a profit. These are some of the most sought-after real estate investments. Although many prefer to hold onto them.
Residential property is also big business if you are looking to start your own property portfolio. There are many areas where you can buy houses in a poor condition at an excellent price, renovate and repair them and then rent them out to tenants. This is lucrative, but can sometimes prove to be tricky if you are unfortunate to get poor tenants, but on the other hand, if the tenants are reliable and good payers, this can be a wonderful way to earn extra income.
Start your own property portfolio bit by bit, and glean information from the experts who have walked the path before you. A good starting point is to put an excellent business plan together well before you decide to embark on this project, as you would do with any other business.
Buying properties at this point in time is a clever move if you have spare money to invest or if you want to get into the real estate business. Some property owners who are willing sellers are finding it tough to sell, as the recession has taken its toll over the past couple of years. This is when you will find an excellent buy and good value for your money.
With the real estate market climbing slowly back into recovery mode, strike while the iron is hot.
Buying low and selling high should be the mantra if you would like to start your own property portfolio.
Investors are spoilt for choice and have never been in a stronger position with such a variety of real estate available.
Borrowing money from banks and institutions is generally quite tough, but there are other ways of seeking the advice and borrowing money when buying and investing in real estate.
Equity companies are pro-active, and take small start-up businesses under their wings whilst growing the business, offering a hands-on approach and assisting with the management and the businesses that they support. These private equity companies are delighted to hear from you especially if your property investment business has potential.
Having the backing of a professional team to assist you along the way when starting up your own property portfolio is also important: these should include an attorney knowledgeable in property law, a really expert architectural and building team, someone who is reliable and honest to assist in renting out your property, and a reputable agent or broker to handle the sale of your property should the need arise.
The above pointers should help guide you in the right direction on how to start your own property portfolio.
Real estate is one of the most exciting and dynamic businesses to be involved in, and historically this is the best place to invest some of your hard earned cash. Many investors buy properties and bank them, and then sell the properties off once they have either served their purpose or have gained value.
At times the investor sells off a portion of the portfolio or a whole portfolio, but timing is the key factor. Most successful property owners, once having built a substantial portfolio prefer to hang on to their assets, and are loath to selling, as the buildings and properties bring in rental income.
If you want to start your own property portfolio, it would be advisable to bank your properties for a couple of years, and then sell them at a profit. A five to seven year period is often a good time.
Real estate is often perceived to be a cutthroat business and not for the faint of heart, but the adrenalin rush when a major deal comes together can beat no other! Properties to buy / properties for sale are always in big demand, and those that are good value for money – well there simply are not enough of them.
Many real estate developers and investors buy run down shopping centres, commercial buildings and warehousing for the sole purpose of fixing them up and selling them off at a profit. These are some of the most sought-after real estate investments. Although many prefer to hold onto them.
Residential property is also big business if you are looking to start your own property portfolio. There are many areas where you can buy houses in a poor condition at an excellent price, renovate and repair them and then rent them out to tenants. This is lucrative, but can sometimes prove to be tricky if you are unfortunate to get poor tenants, but on the other hand, if the tenants are reliable and good payers, this can be a wonderful way to earn extra income.
Start your own property portfolio bit by bit, and glean information from the experts who have walked the path before you. A good starting point is to put an excellent business plan together well before you decide to embark on this project, as you would do with any other business.
Buying properties at this point in time is a clever move if you have spare money to invest or if you want to get into the real estate business. Some property owners who are willing sellers are finding it tough to sell, as the recession has taken its toll over the past couple of years. This is when you will find an excellent buy and good value for your money.
With the real estate market climbing slowly back into recovery mode, strike while the iron is hot.
Buying low and selling high should be the mantra if you would like to start your own property portfolio.
Investors are spoilt for choice and have never been in a stronger position with such a variety of real estate available.
Borrowing money from banks and institutions is generally quite tough, but there are other ways of seeking the advice and borrowing money when buying and investing in real estate.
Equity companies are pro-active, and take small start-up businesses under their wings whilst growing the business, offering a hands-on approach and assisting with the management and the businesses that they support. These private equity companies are delighted to hear from you especially if your property investment business has potential.
Having the backing of a professional team to assist you along the way when starting up your own property portfolio is also important: these should include an attorney knowledgeable in property law, a really expert architectural and building team, someone who is reliable and honest to assist in renting out your property, and a reputable agent or broker to handle the sale of your property should the need arise.
The above pointers should help guide you in the right direction on how to start your own property portfolio.
Friday, February 18, 2011
Good time for buying property
Residential property prices declined in January 2011, albeit from a solid base following their strong recovery last year. However, according to bond originator ooba conditions are favourable for homebuyers to consider getting onto the property ladder.
Market conditions are now favourable for homebuyers to consider getting onto the property ladder, says ooba.
The latest statistics from the oobarometer price index showed a year-on-year decline in the average purchase price of 6.3% to R797 011 in January 2011 from R850 513 a year earlier. The average purchase price of a first time buyer declined by a modest 1.6% year-on-year to R576 675, from R585 992 a year ago.
According to ooba CEO, Saul Geffen, while residential property prices are coming off their recent highs, the period of deflation is likely to be short lived with expectations for overall flat growth for 2011.
Additional statistics also tracked by ooba show there has been a continued trend by South Africa’s major lenders to ease up on their lending criteria. “Over the last year we have seen the main lenders continue to relax their lending criteria and this has continued in January 2011 with the size of the deposit buyers are required to put down showing a significant decline.”
In January the average deposit as a percentage of the purchase price was also down by 41.8% year on year to R117 396, equivalent to 14.7% of the purchase price. The average initial decline ratio also declined by 4.4% to 46.0% in January 2011 from 50.4% a year ago. There was further positive news in January as the effective approval ratio increased by 6.0% year-on-year to 65.6%.
Geffen says in addition to the improved lending environment, the recent decline in prices presents an ideal bargaining opportunity for new homebuyers. “For those homebuyers who have all their ducks in a row, including a deposit to put down, now could be the perfect time to begin negotiations on a property.”
Comments published by Property 24
Market conditions are now favourable for homebuyers to consider getting onto the property ladder, says ooba.
The latest statistics from the oobarometer price index showed a year-on-year decline in the average purchase price of 6.3% to R797 011 in January 2011 from R850 513 a year earlier. The average purchase price of a first time buyer declined by a modest 1.6% year-on-year to R576 675, from R585 992 a year ago.
According to ooba CEO, Saul Geffen, while residential property prices are coming off their recent highs, the period of deflation is likely to be short lived with expectations for overall flat growth for 2011.
Additional statistics also tracked by ooba show there has been a continued trend by South Africa’s major lenders to ease up on their lending criteria. “Over the last year we have seen the main lenders continue to relax their lending criteria and this has continued in January 2011 with the size of the deposit buyers are required to put down showing a significant decline.”
In January the average deposit as a percentage of the purchase price was also down by 41.8% year on year to R117 396, equivalent to 14.7% of the purchase price. The average initial decline ratio also declined by 4.4% to 46.0% in January 2011 from 50.4% a year ago. There was further positive news in January as the effective approval ratio increased by 6.0% year-on-year to 65.6%.
Geffen says in addition to the improved lending environment, the recent decline in prices presents an ideal bargaining opportunity for new homebuyers. “For those homebuyers who have all their ducks in a row, including a deposit to put down, now could be the perfect time to begin negotiations on a property.”
Comments published by Property 24
Thursday, December 2, 2010
House prices top 2008 peak
Although housing activity as measured by the number and value of sales is still some 50% below the level recorded at the height of the boom, house prices have recently surpassed their February 2008 peak.
House prices fell by only 8% from peak to trough (February 2008 to May 2009) in contrast to many international markets like the US, UK and Europe where house prices fell by up to 30% over the past two years.
Latest housing data from FNB show that in November the average price of a house was 2,8% higher than the peak recorded in February 2008. That means that house prices fell by only 8% from peak to trough (from February 2008 to May 2009) and is in contrast to many international markets like the US, UK and Europe where house prices fell by up to 30% over the past two years.
Many of these housing markets have yet to see prices recover to pre-recession levels. For instance, in Ireland house prices are now back to levels last seen in 2002, according to latest data from UK-based property group Knight Frank.
FNB’s latest housing index further shows that South African house prices are up 36,5% over the past five years to November. That’s roughly in line with inflation, which means that in real terms (after adjusting for inflation) South African homeowners have seen little, if any, growth in the value of their residential bricks and mortar over the past five years. But over the 10 years to November house prices are up a healthy 205%. That translates into real growth of 66%.
Homeowners and property investors should, however, not expect too much action on the house price growth front over the short term. FNB property strategist John Loos says despite signs of a mild improvement in residential demand the market still faces a number of challenges.
The key longer-term challenge for the residential market remains the high household debt-to-disposable income ratio, which was still at a record high of 78,2% in the second quarter. Says Loos: ``The still-high household debt ratio, unfortunately, leads us to expect another pedestrian year in 2011 for residential property, following a very mild short term up tick.’’ - Info supplied by Property 24.
House prices fell by only 8% from peak to trough (February 2008 to May 2009) in contrast to many international markets like the US, UK and Europe where house prices fell by up to 30% over the past two years.
Latest housing data from FNB show that in November the average price of a house was 2,8% higher than the peak recorded in February 2008. That means that house prices fell by only 8% from peak to trough (from February 2008 to May 2009) and is in contrast to many international markets like the US, UK and Europe where house prices fell by up to 30% over the past two years.
Many of these housing markets have yet to see prices recover to pre-recession levels. For instance, in Ireland house prices are now back to levels last seen in 2002, according to latest data from UK-based property group Knight Frank.
FNB’s latest housing index further shows that South African house prices are up 36,5% over the past five years to November. That’s roughly in line with inflation, which means that in real terms (after adjusting for inflation) South African homeowners have seen little, if any, growth in the value of their residential bricks and mortar over the past five years. But over the 10 years to November house prices are up a healthy 205%. That translates into real growth of 66%.
Homeowners and property investors should, however, not expect too much action on the house price growth front over the short term. FNB property strategist John Loos says despite signs of a mild improvement in residential demand the market still faces a number of challenges.
The key longer-term challenge for the residential market remains the high household debt-to-disposable income ratio, which was still at a record high of 78,2% in the second quarter. Says Loos: ``The still-high household debt ratio, unfortunately, leads us to expect another pedestrian year in 2011 for residential property, following a very mild short term up tick.’’ - Info supplied by Property 24.
Sunday, November 21, 2010
50 Points rate cut!
The South African Reserve Bank’s Monetary Policy Committee (MPC) lowered the key monetary policy interest rate – the repo rate – by another 50 basis points to 5,5%. On the back of this latest cut in the repo rate, Absa announced that its lending rates to the public, i.e. prime and variable mortgage rates, will decline by the same magnitude to a level of 9%, effective from 19 November 2010.
Interest rates have been cut by a cumulative 650 basis points since December 2008, which brings the mortgage rate to its lowest level since December 1973, while the prime rate is back to a level last seen in May 1974. On the back of the further drop in the mortgage rate, monthly repayments on mortgage loans will in general be 33,5% lower compared with early December 2008 when the mortgage rate was still at a level of 15,5%.
The further cut in interest rates came on the back of recent developments in respect of the domestic economy. Year-on-year growth in manufacturing production tapered off to only 1,4% in September; employment remained under pressure up to the third quarter of the year; and the Reserve Bank’s leading business cycle indicator moved largely sideways in the past few months up to August, suggesting that the performance of the economy could remain around current levels towards the end of the year and into early 2011.
Consumers continue to experience some financial pressure in the wake of still high levels of debt in relation to disposable income, job losses and relatively tight credit conditions. Growth in credit extension to the household sector improved during the course of the year after bottoming in late 2009, but is still well below the 10% level on an annual basis. Consumer confidence was largely unchanged in 2010, while business confidence came under further pressure in October.
Consumer price inflation, at 3,2% year-on-year in September, is at its lowest level since December 2005. This was to some extent the result of continued rand strength on the back of a weak US dollar, while food price inflation remains benign. The CPI inflation rate is forecast to remain low in the rest of the year and is expected to rise only gradually during 2011.
The direction of interest rates in 2011 will to a large extent depend on economic developments and consequent movements in key economic indicators, such as consumer price inflation, during the course of the year.
Article By Jacques du Toit 18 Nov 2010 and private Property.
Interest rates have been cut by a cumulative 650 basis points since December 2008, which brings the mortgage rate to its lowest level since December 1973, while the prime rate is back to a level last seen in May 1974. On the back of the further drop in the mortgage rate, monthly repayments on mortgage loans will in general be 33,5% lower compared with early December 2008 when the mortgage rate was still at a level of 15,5%.
The further cut in interest rates came on the back of recent developments in respect of the domestic economy. Year-on-year growth in manufacturing production tapered off to only 1,4% in September; employment remained under pressure up to the third quarter of the year; and the Reserve Bank’s leading business cycle indicator moved largely sideways in the past few months up to August, suggesting that the performance of the economy could remain around current levels towards the end of the year and into early 2011.
Consumers continue to experience some financial pressure in the wake of still high levels of debt in relation to disposable income, job losses and relatively tight credit conditions. Growth in credit extension to the household sector improved during the course of the year after bottoming in late 2009, but is still well below the 10% level on an annual basis. Consumer confidence was largely unchanged in 2010, while business confidence came under further pressure in October.
Consumer price inflation, at 3,2% year-on-year in September, is at its lowest level since December 2005. This was to some extent the result of continued rand strength on the back of a weak US dollar, while food price inflation remains benign. The CPI inflation rate is forecast to remain low in the rest of the year and is expected to rise only gradually during 2011.
The direction of interest rates in 2011 will to a large extent depend on economic developments and consequent movements in key economic indicators, such as consumer price inflation, during the course of the year.
Article By Jacques du Toit 18 Nov 2010 and private Property.
Sunday, September 26, 2010
Still a buyer's market!
Residential demand weakens further
22 Sep 2010
Demand for residential property has weakened again for the second successive quarter in the third quarter (3Q) of 2010 and primary residential buying still predominates.
The 3Q FNB Estate Agent survey showed the sample of estate agents surveyed in 3Q perceived residential demand to have weakened for the second consecutive quarter, after a previous strengthening trend that started in late 2008.
On a scale of 1 to 10, the agent demand activity rating declined from 5,96 to 5,66.
John Loos, property economist at FNB, said while seasonal factors can play a role, year-on-year (y/y) growth in the activity rating also declined from a previous quarter’s +24,4% to 0,2% in 3Q. “This suggests that the slowdown is more than just seasonal.”
What are the causes of this declining demand?
The agents surveyed continued to point to apparent unrealistic pricing in the market. Estimated average time of properties on the market was still a lengthy 15 weeks and 4 days in Q3. “While this is down from the previous quarter’s 17 weeks and 1 day, it would still appear far too long for an average, given that in the healthier market days of 2005/6 the average time was generally below two months,” Loos said.
“Furthermore, the percentage of sellers having to drop their asking price remained stubbornly unchanged from the previous quarter at 81%, and the average price drop for that majority having to drop their prices was estimated at -12%.”
He says all this points to the fact that it is still very much a buyers’ market and that a select group of buyers, who have access to financial resources, generally possess significant bargaining power.
“The existence of a buyers’ market still has much to do with ongoing household sector financial pressure, which restricts demand while also promoting financial pressure-related selling on a very significant scale. Fifty-two percent of agents surveyed believe that household incomes have fallen far behind average house prices. This is well up from the 38% reading in the corresponding quarter a year ago.”
But then there are also restrictions that aren’t market-related. “Agents are increasingly citing tight bank lending criteria or the restrictive National Credit Act (NCA) as being negative factors for the market.”
Perhaps a tell-tale sign of the times, primary residential demand remained high in Q3 and unchanged at 90% of total buying. This is at the expense of non-essential buying, such as buy-to-let, buying for relatives and holiday homes. “Back in 2007, primary residential demand was significantly lower at around 80%.”
In terms of specific groups’ buying trends, previously-disadvantaged groups seem to have held their own while first-time buyers and single are struggling. “On a relative basis, the agent survey suggests that the black population group has maintained their share of suburban home buying, and possibly even increasing it a little in 2010.
“However, as at the beginning of 2007, single people buying property were estimated at 21% of total buyers. This group has diminished to an estimated 13% in the Q3 2010 survey. This is weaker than the 15% recorded in the previous quarter’s survey.
“In contrast to this, couples, expressed as a percentage of total buyers, increased to 87% from the previous quarter’s 85%.”
Loos ascribes this trend to singles being more vulnerable to economic shocks, couples being able to pool their resources together for finance and singles being more flexible than families in terms of renting and moving between properties.
Another buyer group that is showing alarming weakening signs is first-time buyers. “From the previous quarter’s 19%, the percentage of first-time buyers has declined to 15% in the Q3 survey.”
In terms of seller trends, financial pressure crops up again. “Agents continue to estimate the largest percentage to be sellers selling their homes in order to downscale due to financial pressure. This percentage estimate rose from 20% in the 2nd Quarter (2Q) to 25% in Q3 2010 – the first increase since 2Q 2009.
“Simultaneously, the estimated percentage selling in order to upgrade declined mildly from 15% in Q2 to 12% in Q3.”
An encouraging trend is the drop in emigration selling. “The emigration estimate remains low at 6% of total selling, which is down by a percentage point from the previous quarter’s 7%. This is a far cry from the 20% recorded at the height of the 2008 emigration surge.”
All this points to the buyers’ market remaining firmly entrenched, but with both buyers and sellers experiencing financial strain and high debt levels. With residential demand taking pains, sellers – especially those who are under financial pressure – would therefore be well-advised to keep their prices market-related if they have any hope of achieving a reasonably quick sale. – Eugene Brink
Information supplied by Property24
22 Sep 2010
Demand for residential property has weakened again for the second successive quarter in the third quarter (3Q) of 2010 and primary residential buying still predominates.
The 3Q FNB Estate Agent survey showed the sample of estate agents surveyed in 3Q perceived residential demand to have weakened for the second consecutive quarter, after a previous strengthening trend that started in late 2008.
On a scale of 1 to 10, the agent demand activity rating declined from 5,96 to 5,66.
John Loos, property economist at FNB, said while seasonal factors can play a role, year-on-year (y/y) growth in the activity rating also declined from a previous quarter’s +24,4% to 0,2% in 3Q. “This suggests that the slowdown is more than just seasonal.”
What are the causes of this declining demand?
The agents surveyed continued to point to apparent unrealistic pricing in the market. Estimated average time of properties on the market was still a lengthy 15 weeks and 4 days in Q3. “While this is down from the previous quarter’s 17 weeks and 1 day, it would still appear far too long for an average, given that in the healthier market days of 2005/6 the average time was generally below two months,” Loos said.
“Furthermore, the percentage of sellers having to drop their asking price remained stubbornly unchanged from the previous quarter at 81%, and the average price drop for that majority having to drop their prices was estimated at -12%.”
He says all this points to the fact that it is still very much a buyers’ market and that a select group of buyers, who have access to financial resources, generally possess significant bargaining power.
“The existence of a buyers’ market still has much to do with ongoing household sector financial pressure, which restricts demand while also promoting financial pressure-related selling on a very significant scale. Fifty-two percent of agents surveyed believe that household incomes have fallen far behind average house prices. This is well up from the 38% reading in the corresponding quarter a year ago.”
But then there are also restrictions that aren’t market-related. “Agents are increasingly citing tight bank lending criteria or the restrictive National Credit Act (NCA) as being negative factors for the market.”
Perhaps a tell-tale sign of the times, primary residential demand remained high in Q3 and unchanged at 90% of total buying. This is at the expense of non-essential buying, such as buy-to-let, buying for relatives and holiday homes. “Back in 2007, primary residential demand was significantly lower at around 80%.”
In terms of specific groups’ buying trends, previously-disadvantaged groups seem to have held their own while first-time buyers and single are struggling. “On a relative basis, the agent survey suggests that the black population group has maintained their share of suburban home buying, and possibly even increasing it a little in 2010.
“However, as at the beginning of 2007, single people buying property were estimated at 21% of total buyers. This group has diminished to an estimated 13% in the Q3 2010 survey. This is weaker than the 15% recorded in the previous quarter’s survey.
“In contrast to this, couples, expressed as a percentage of total buyers, increased to 87% from the previous quarter’s 85%.”
Loos ascribes this trend to singles being more vulnerable to economic shocks, couples being able to pool their resources together for finance and singles being more flexible than families in terms of renting and moving between properties.
Another buyer group that is showing alarming weakening signs is first-time buyers. “From the previous quarter’s 19%, the percentage of first-time buyers has declined to 15% in the Q3 survey.”
In terms of seller trends, financial pressure crops up again. “Agents continue to estimate the largest percentage to be sellers selling their homes in order to downscale due to financial pressure. This percentage estimate rose from 20% in the 2nd Quarter (2Q) to 25% in Q3 2010 – the first increase since 2Q 2009.
“Simultaneously, the estimated percentage selling in order to upgrade declined mildly from 15% in Q2 to 12% in Q3.”
An encouraging trend is the drop in emigration selling. “The emigration estimate remains low at 6% of total selling, which is down by a percentage point from the previous quarter’s 7%. This is a far cry from the 20% recorded at the height of the 2008 emigration surge.”
All this points to the buyers’ market remaining firmly entrenched, but with both buyers and sellers experiencing financial strain and high debt levels. With residential demand taking pains, sellers – especially those who are under financial pressure – would therefore be well-advised to keep their prices market-related if they have any hope of achieving a reasonably quick sale. – Eugene Brink
Information supplied by Property24
Wednesday, August 11, 2010
Property prices to fall again?
The FNB Estate Agent Survey for the second quarter of 2010 showed agents pointing to weaker demand than that of the previous quarter. Of concern, too, was a sharp up-tick in the estimated average time of a property on the market, from a previous quarter’s 12 weeks and four days to 17 weeks and one day. This suggests that price levels have got further out of touch with reality. The implications could be that prices begin to come under pressure, and indeed in June we have seen a slowing in the pace of acceleration in house price growth. Prices to fall again?
Following relatively pedestrian growth in the median property price over the past few months, July marked the first month of real growth in the sector. The median house price increased by a further 0.8% m/m in July (2.3% m/m in June), marginally above the average monthly increase of 1.2% recorded since the start of the year, signalling an improvement in both demand and supply fundamentals. Thus, the median house price increased to R597 160 from a revised R592 500 in June, representing an increase of 7.3% y/y from 3.2% y/y in June. Although this increase is sharp, it needs to be borne in mind that this improvement is from a very low base this time last year, when the median price contracted by around 5%. In real terms, the median price jumped to 3.2% y/y from -1.0% y/y in June, in part also due to the falling inflation profile. Standard Bank expects inflation to moderate to 3.9% y/y in July from 4.2% y/y in June. Confidence sees market improving
Info supplied by Cyberprop!
Following relatively pedestrian growth in the median property price over the past few months, July marked the first month of real growth in the sector. The median house price increased by a further 0.8% m/m in July (2.3% m/m in June), marginally above the average monthly increase of 1.2% recorded since the start of the year, signalling an improvement in both demand and supply fundamentals. Thus, the median house price increased to R597 160 from a revised R592 500 in June, representing an increase of 7.3% y/y from 3.2% y/y in June. Although this increase is sharp, it needs to be borne in mind that this improvement is from a very low base this time last year, when the median price contracted by around 5%. In real terms, the median price jumped to 3.2% y/y from -1.0% y/y in June, in part also due to the falling inflation profile. Standard Bank expects inflation to moderate to 3.9% y/y in July from 4.2% y/y in June. Confidence sees market improving
Info supplied by Cyberprop!
Friday, March 26, 2010
Interest rate cut - a gift
The interest rate cut announced yesterday by the reserve bank surprised most of the economist as every one expected an "unchanged" announcement. This is good news for everybody with debt. You will save about R264/m on a bond of R800 000, which will result in a saving of R3168 over a year. (R64000 over the 20 years)
If you decide to keep your monthly installment the same will you reduce your repayment term with about 5 years. This will have the same effect on your total payment made over the total period as a 8.75% interest rate.
It does not matter which way you look at it, this rates cut is a small gift from the reserve bank. Spend / Invest it wisely.
Greetings
If you decide to keep your monthly installment the same will you reduce your repayment term with about 5 years. This will have the same effect on your total payment made over the total period as a 8.75% interest rate.
It does not matter which way you look at it, this rates cut is a small gift from the reserve bank. Spend / Invest it wisely.
Greetings
Tuesday, February 16, 2010
Traffic circle for sale
After the big clean up effort form the Chamber of Commerce, Nehemia and the local counsel did we think we should try and sell the main traffic circle as you enter from Vanderbijlpark.
Although we did not manage to sell it we enjoyed all the hooting and cheering that we reached from all of you how happened to pass us on Friday morning. Thanks for the smiles and comments we received.
Greetings
The Sus Stoltz Team
Thursday, January 28, 2010
2010
Hi All,
I can't believe that the first month of 2010 is almost behind us. It was a busy month with lost of news about the 2010 soccer world cup. Positive news about ticket sales but unfortunately bad news from Match about the need for accommodation during this event. They cancelled almost 500 000 booked beds.
2009 Ended on a positive note for us as we had the most sales in a month during December. We are still very positive as the enquiries for suitable houses are still increasing and banks are willing to loan again.
Staying on the finance issue we received positive news for the Reserve Bank as well as they decided to keep the interest rate unchanged. Stability is the name of the game.
So all the best for 2010 and may we all stay positive.
I can't believe that the first month of 2010 is almost behind us. It was a busy month with lost of news about the 2010 soccer world cup. Positive news about ticket sales but unfortunately bad news from Match about the need for accommodation during this event. They cancelled almost 500 000 booked beds.
2009 Ended on a positive note for us as we had the most sales in a month during December. We are still very positive as the enquiries for suitable houses are still increasing and banks are willing to loan again.
Staying on the finance issue we received positive news for the Reserve Bank as well as they decided to keep the interest rate unchanged. Stability is the name of the game.
So all the best for 2010 and may we all stay positive.
Tuesday, November 17, 2009
Rentekoers
Hi Julle,
Ongelukkig geen verlaging in die rentekoers nie maar gelukkig ook nie 'n verhoging nie. Die ekonome voorspel dan ook nie 'n verdere verlaging nie maar glo dan ook dat dit onveranderd sal bly vir die volgende kwartaal of twee. Volgens die meeste banke toon die eiendomsmark dan reeds 'n positiewe groei wat dan ook weer 'n effek op die huispryse sal uitoefen. By ons het ons nie regtig 'n afname (behalwe 'n afname op die eiendomme wat van die begin af te hoog gelys was) gesien nie.
Alhoewel die verlaging van rentekoerse die afgelope tyd wel 'n invloed het is dit my mening dat die verandering in die banke se houding oor hul uitleenkriteria die werklike hupstoot vir ons gegee het. Hulle is nou weer bereid om te kyk na 100% lenings en leen dan ook weer geld uit.
Ek glo dit is nou weer tyd om eiendom te koop en glo ook daar juis nou weer winskopies is veral waar die verkopers steeds onder druk is en slegs van die eiendom ontslae wil raak.
Hoe voel julle oor die toekoms van die eiendomsmark en die algemene ekonomiese toestand van ons land en spesifiek ons dorp?
Jacques
www.susstoltz.co.za
Ongelukkig geen verlaging in die rentekoers nie maar gelukkig ook nie 'n verhoging nie. Die ekonome voorspel dan ook nie 'n verdere verlaging nie maar glo dan ook dat dit onveranderd sal bly vir die volgende kwartaal of twee. Volgens die meeste banke toon die eiendomsmark dan reeds 'n positiewe groei wat dan ook weer 'n effek op die huispryse sal uitoefen. By ons het ons nie regtig 'n afname (behalwe 'n afname op die eiendomme wat van die begin af te hoog gelys was) gesien nie.
Alhoewel die verlaging van rentekoerse die afgelope tyd wel 'n invloed het is dit my mening dat die verandering in die banke se houding oor hul uitleenkriteria die werklike hupstoot vir ons gegee het. Hulle is nou weer bereid om te kyk na 100% lenings en leen dan ook weer geld uit.
Ek glo dit is nou weer tyd om eiendom te koop en glo ook daar juis nou weer winskopies is veral waar die verkopers steeds onder druk is en slegs van die eiendom ontslae wil raak.
Hoe voel julle oor die toekoms van die eiendomsmark en die algemene ekonomiese toestand van ons land en spesifiek ons dorp?
Jacques
www.susstoltz.co.za
Wednesday, November 11, 2009
Getting in touch with technology
Hi to all your fellow bloggers,
I am investicating and trying to keep up with the ever changing and evolving technology. Blogging might be old news for you but I tend to be the last to optimise new trends.
I would like to use this service to communicate with all rolplayers, stakeholders and just the general public who might have an interest in any of the property sectors and more specifically in the Sasolburg, Vaalpark and Vaal Triangle areas.
Lets talk property!
www.susstoltz.co.za
I am investicating and trying to keep up with the ever changing and evolving technology. Blogging might be old news for you but I tend to be the last to optimise new trends.
I would like to use this service to communicate with all rolplayers, stakeholders and just the general public who might have an interest in any of the property sectors and more specifically in the Sasolburg, Vaalpark and Vaal Triangle areas.
Lets talk property!
www.susstoltz.co.za
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About Me
- Jacques
- Since 1997 am I a full time real estate professional with all the basic qualifications and registrations required by the EAAB but also obtained a Diploma in Sectional Scheme Management (STSM) from the UCT